“Organizations require more than material resources and technical information if they are to survive and thrive in their social environ- ments. They also need social acceptability and credibility” (Scott, Ruef, Mendel, and Caronna 2000: 237)—in short, they require legitimacy. Suchman (1995b: 574) provides a helpful definition of this central con- cept: “Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions.” Legitimacy is a generalized rather than an event-specific evaluation and is “possessed objectively, yet created subjectively” (Suchman 1995b: 574). The “socially constructed systems” to which Suchman refers are, of course, institutional frameworks.
Max Weber was the first great social theorist to stress the impor- tance of legitimacy. In his formulation of types of social action, he gave particular attention to those actions guided by a belief in the existence of a legitimate order: a set of “determinable maxims,” a model regarded by the actor as “in some way obligatory or exemplary for him” (Weber 1924/1968, Vol. 1: 31). In his empirical/historical work, he applied his approach to the legitimation of power structures, both corporate and governmental, arguing that power becomes legitimated as authority to the extent that its exercise is supported by prevailing social norms, whether traditional, charismatic, or rational-legal (see Deephouse and Suchman 2008; Dornbusch and Scott 1975: Ch. 2; Ruef and Scott 1998). In his cultural-institutional perspective, Parsons (1956/1960b) broadened the focus of legitimation to include the goals of an organization, determining the extent to which they were congru- ent with the values extant in the society. And as we have seen, these arguments have been advanced and amplified by neoinstitutionalists, such as Berger and Luckmann (1967), Meyer and Rowan (1977), and Meyer and Scott (1983b) to include the legitimation of strategies, struc- tures, and procedures.
In a resource-dependence or social exchange approach to organiza- tions, legitimacy is typically treated as simply another kind of resource that organizations extract from their institutional environment (e.g., Dowling and Pfeffer 1975; Suchman 1995b). Scholars emphasizing the regulative pillar share, at least to some extent, this interpretation as they stress the benefits or costs of compliance. However, from a strong institutional perspective, legitimacy is not a commodity to be pos- sessed or exchanged but a condition reflecting perceived consonance with relevant rules and laws or normative values, or alignment with cultural-cognitive frameworks. Like some other invisible properties such as oxygen, the importance of legitimacy become immediately and painfully apparent only if lost, suggesting that it is not a specific resource, but a fundamental condition of social existence.
Berger and Luckmann (1967) describe legitimacy as evoking a “second order” of meaning. In their early stages, institutionalized activities develop as repeated patterns of behavior that evoke shared meanings among the participants. The legitimation of this order involves connecting it to wider cultural frames, norms, or rules. “Legit- imation ‘explains’ the institutional order by ascribing cognitive validity to its objectified meanings. Legitimation justifies the institutional order by giving a normative dignity to its practical imperatives” (pp. 92–93). In a similar fashion, Johnson, Dowd, and Ridgway (2006) compare and contrast the social psychological and the organizational views of legiti- macy to arrive at a four-stage process: innovation, local validation, diffu- sion, and general validation. That is, for new actions to be legitimated, they must be locally accepted, and once they are “construed as a valid social fact, [they are] adopted more readily by actors in other local con- texts” (p. 60). As a result of successful diffusion, “the new social object acquires widespread acceptance, becoming part of society’s shared culture” (p. 61).6 And emphasizing the cultural-cognitive dimension, Meyer and I propose that “organizational legitimacy refers to the degree of cultural support for an organization” (Meyer and Scott 1983a: 201).
This vertical dimension entails the support of significant others: various types of authorities—cultural as well as political—empowered to confer legitimacy. The reproduction of practices is supported by structures residing at multiple levels (Colyvas and Jonsson 2011). Who these authorities are varies from time to time and place to place but, in our time, agents of the state and professional and trade associations are often critical for organizations. Certification or accreditation by these bodies is frequently employed as a prime indicator of legitimacy (Dowling and Pfeffer 1975; Ruef and Scott 1998). In complex situations, individuals or organizations may be confronted by competing sover- eigns. Actors confronting conflicting normative requirements and stan- dards typically find it difficult to take action since conformity to one undermines the normative support of other bodies. “The legitimacy of a given organization is negatively affected by the number of different authorities sovereign over it and by the diversity or inconsistency of their accounts of how it is to function” (Meyer and Scott 1983a: 202).
There is always the question as to whose assessments count in determining the legitimacy of a set of arrangements. Many structures persist and spread because they are regarded as appropriate by entrenched authorities, even though their legitimacy is challenged by other, less powerful constituencies. Martin (1994), for example, notes that salary inequities between men and women are institutionalized in American society even though the disadvantaged groups perceive them to be unjust and press for reforms. “Legitimate” structures may, at the same time, be contested structures.
Stinchcombe (1968) asserts that, in the end, whose values define legitimacy is a matter of concerted social power:
A power is legitimate to the degree that, by virtue of the doctrines and norms by which it is justified, the power-holder can call upon sufficient other centers of power, as reserves in case of need, to make his power effective. (p. 162)
It is important, however, to point out that power is not always a top-down process, but can involve bottom-up phenomena. Power, for example, can be authorized by superordinate parties (Stinchcombe 1968) or endorsed by those subject to the power-wielder (Dornbusch and Scott 1975; Zelditch and Walker 1984) who collectively enforce norms sup- porting compliance. Power can arise out of the mobilization of subordi- nate groups as they attempt to advance their own values and interests.
While power certainly matters, in supporting legitimacy processes as in other social activities, power is not the absolute arbiter. Entrenched power is, in the long run, hapless against the onslaught of opposing power allied with more persuasive ideas or stronger commitments.
Consistent with the preceding discussion, each of the three pillars provides a basis of legitimacy, albeit a different one (see Table 3.1).7 The regulatory emphasis is on conformity to rules: Legitimate organiza- tions are those established by and operating in accordance with rele- vant legal or quasi-legal requirements. A normative conception stresses a deeper, moral base for assessing legitimacy. Normative controls are much more likely to be internalized than are regulative controls, and the incentives for conformity are hence likely to include intrinsic as well as extrinsic rewards. A cultural-cognitive view points to the legiti- macy that comes from conforming to a common definition of the situ- ation, frame of reference, or a recognizable role (for individuals) or structural template (for organizations). To adopt an orthodox structure or identity in order to relate to a specific situation is to seek the legiti- macy that comes from cognitive consistency. The cultural-cognitive mode is the deepest level since it rests on preconscious, taken-for- granted understandings.
The bases of legitimacy associated with the three elements, and hence the types of indicators employed, are decidedly different and may be in conflict. A regulative view would ascertain whether the organization is legally established and whether it is acting in accord with relevant laws and regulations. A normative orientation, stressing moral obligations, may countenance actions departing from mere legal requirements. Many professionals adhere to normative standards that motivate them to depart from the rule-based requirements of bureau-cratic organizations. And whistle-blowers claim that they are acting on the basis of a “higher authority” when they contest organizational rules or the orders of superiors. An organization such as the Mafia may be widely recognized, signifying that it exhibits a culturally constituted mode of organizing to achieve specified ends, and it is regarded as a legitimate way of organizing by its members. Nevertheless, it is treated as an illegal form by police and other regulative bodies, and it lacks the normative endorsement of most citizens.
What is taken as evidence of legitimacy varies by which elements of institutions are privileged.
Source: Scott Richard (2013), Institutions and Organizations: Ideas, Interests, and Identities, SAGE Publications, Inc; Fourth edition.